Anthropic's IPO drawing strong interest, surpasses SpaceX's early demand
What's the story
Anthropic's roadshow is underway and will continue till next Wednesday. The AI company's $64 billion initial public offering (IPO) is already drawing significant interest from institutional investors. Two people familiar with the companies' offerings told Reuters that the demand for Anthropic's IPO has already surpassed that of SpaceX in its early days. By the end of Tuesday, on day one of the roadshow, it was oversubscribed about two times. By the end of Thursday, the book was oversubscribed six times.
Market response
Roadshow for Anthropic's IPO to continue till next Wednesday
The investor interest in Anthropic's IPO has been far greater than that seen during SpaceX's roadshow.
By the end of its second day, SpaceX's IPO was two times oversubscribed.
However, despite this early success, bankers and investors expect Anthropic's order book to grow substantially as the roadshow progresses.
This is due to the size of the IPO and strong early demand from institutional investors.
Market concerns
Investors grappling with questions on Anthropic's long-term competitive position
As they assess the offering and company's valuation, investors are grappling with two fundamental questions.
One is whether Anthropic can maintain its lead as competitors such as Alphabet's Google rapidly catch up in developing advanced AI models.
The other is whether its Claude chatbot can maintain its lead beyond coding, in the broader market for knowledge workers.
These concerns highlight the difficulty of valuing a company with fast-growing revenue but an uncertain long-term competitive position.
Information gap
Some investors wary of high valuation amid AI sector shakeout
Some investors are wary of an offering at a high valuation amid a broader shakeout in the AI sector.
The limited disclosure has left some questions unanswered, particularly about Anthropic's long-term competitive position and revenue growth trajectory.
One investor who attended a roadshow meeting said the company had not provided detailed answers to some of their questions.
Revenue projections
Investors arriving at different estimates of how quickly revenue grows
Investors are arriving at widely different estimates of how quickly Anthropic's revenue will grow, creating a broad range of potential valuation outcomes.
The key figure underpinning these models is Anthropic's projected 2028 revenue, which banks estimate at around $270 billion to $280 billion.
For a high-growth company like Anthropic, investors typically give significant weight to future revenue growth when assessing its value.